don’t test French resistance

  • 12 Aug 2011 at 11:39 AM

Half of Europe Bans Thinking Sad Thoughts About Banks

Short sale bans. Is there anything they can’t do?

Maybe. But does it matter? If your position is just that “speculation” on stocks is the moral equivalent of puppy-murder and should never be profitable, then you just say things like “let’s ban short sales” and don’t worry about the details. You take shorting of bank shares as a personal affront, and your goal is not to have functioning markets but just to prove that you’re tough. And your name might be Jean-Pierre Jouyet:

Jean-Pierre Jouyet, head of the AMF, the French securities regulator, said on Thursday night: “They [investors] wanted to test French resistance. This is our response, as always very determined, and it will be so for all those who want to put us to the test.”

But, as we’re seeing with new short sale bans from France, Italy, Spain and Belgium, this approach sometimes has problems, because most short selling takes place in an actual world where other things happen too. Like:
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